Economics Of Homebuilding
The Economics Definition
Economics is the study of how people use scarce resources to satisfy their unlimited wants. (McEachern, p.2)MHI Homebuilders is a company that builds houses in the metropolitan areas of Texas. There are several issues that effect the company, which relates to economics. There are interest rates, price of materials and labor and lastly the demand of the product. One of the current dilemmas the company is facing is how to stay competitive with the competition, during the current recession and economic downturn. Even though the homebuilding industry is doing fairly well, there is still room for gaining market share and improving customer service and satisfaction. The economics changes in the lending rates of banks and the mortgage rates of the consumers play a vital role in our ability to receive money to build and the consumer ability to purchase a home by gaining a mortgage.
There are several other builders trying to build the same types of homes in the same area of Texas. Most of these homes are being built cheaper and more efficient than MHI ?s homes. Our product is relatively more expensive than some of our competition
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